For the businesses that buy, rent or lease capital-equipment from your company, a traditional approach to equipment financing isn’t always optimal — which means it’s not always in your best interests either.
US companies finance nearly $1 trillion in equipment annually, according to the Equipment Leasing and Finance Association, making it a vital engine for economic growth. Traditionally, the financing companies use to secure the tools and supplies they need to function comes from banks and commercial lenders. While these lenders typically offer the lowest rates of interest, their qualifying requirements are relatively stringent, forcing some companies to consider alternative lenders that tend to charge higher rates. Banks prefer companies that have been in business for at least a year and have credit scores of 650 or more.
Meanwhile, the coronavirus pandemic is reshaping business and workplace norms. As a result, equipment providers face financial and operational pressures from new economic realities, new regulations, and an accelerated shift toward digital infrastructures in almost every industry. In this environment, equipment providers are scrambling to adapt, meet current demand, and prepare for an anticipated post-Covid recovery.
A white-label financing platform with best-of-breed technology
“Fortunately there’s a way capital-equipment makers and dealers can appeal to customers — and not just those who wouldn’t qualify for bank financing — while benefiting themselves,” says Elena Ionenko, co-founder and chief operating officer of TurnKey Lender, a lending-tech provider with customers in more than 50 countries. “Suppliers can provide financing in-house using third-party, cloud-based software that’s flexible, secure, and easy to use.”
Innovations in financial technology have made secure transactions possible wherever there’s internet connectivity, whether that’s at the checkout counter, online, or at a jobsite. This flexibility, already associated with e-commerce, has become part of the lending landscape as well in recent years, with far-reaching implications for equipment suppliers and the companies they serve in fields as diverse as agriculture, transportation, and medical devices.
Case Study: Equipment Finance: End-to-End Automation of & Digital Lending In-house
In a nutshell, your companies financing options now include a tech-assisted DIY approach that can save you time and money while enhancing customer relationships and bolstering cross-selling initiatives.
Instead of leaving your customers to arrange financing on their own, or serving as a conduit to traditional sources of finance, you can deploy a white-label platform with best-of-breed technology — including innovative artificial intelligence and deep-neural learning — that provides instant credit decisioning and automates manual lending processes to streamline every step of customer experience.
Provide financing decisions in seconds, grow customer value
With help from smart lending technology, equipment dealers can:
- Instantly make decisions on credit applications
- Provide flexible lease and loan financing options to suit all customers, with pricing commensurate with the risk associated with particular borrowers
- Increase average order size
- Flatten income seasonality with installments coming in throughout the year
- Update, streamline and automate legacy processes for digital transformation
- Reduce, even eliminate, human error and other operational inefficiencies
- Easily integrate lending software with any system software in order to centralize lending operations
- Earn new lending fees while retaining access to and control over customer and business data
Further, with cloud-based lending, equipment makers can grow customer lifetime value by:
- Providing an easy and effortless lending experience with intuitive web and mobile interfaces
- Enhancing post-financing communications so customers receive regular notices of payments due and other reminders
- Deploying AI that can provide insights on customer preferences and behaviors for more targeted marketing and special offers
- Creating custom credit products with just a few clicks
TurnKey Lender’s cloud-based equipment-financing and asset-leasing platform is a case in point. The system incorporates the manufacturer’s order-processing automation, business logic, loan management, reporting, and customer portal in an integrated solution, providing manufacturers, distributors, and resellers with bank-grade credit decisioning.
Flexibility and support for in-house equipment financiers
With TurnKey Lender, your company can implement equipment-based loan origination in ways best suited to your industry and your company, including rent-to-own, lease-to-own, and value-add incentive programs. Integration of the lending platform with your website and your e-catalog converts your “shopping cart” into a financing platform.
But don’t you have to be an experienced lender to operate a financing platform? That was true in the past, says Ionenko, but it isn’t the case anymore. “TurnKey Lender takes care of all the time-consuming financing tasks based on configurations that you select, and of course we provide staff training and live support 24/7.”
This flexibility lets your company consider financing for applicants that might fly under other financiers’ radar. Using inputs like the would-be borrower’s income structure, expenses, and other financial behaviors, as well as traditional considerations such as longevity and credit scores, your company can uncover hidden gems, secure in the knowledge they’ve been analyzed by the industry-leading AI.
In addition, TurnKey Lender comes with integrations and proprietary modules that allow your company to complete processing, underwriting, origination, and disbursement processes in a matter of minutes.
“The first question you have to ask yourself as an equipment supplier is whether you’re happy with time-consuming and restrictive lending processes that may turn away good clients,” says Ionenko. “If you’re not, there are time-tested and sophisticated financing options in the form of flexible, intuitive, and fully-digitalized platforms, among which TurnKey Lender is an acknowledged leader.”
